Author: Glossary

The division of financial risk among those furnishing the service. For example, if a hospital and group of physicians form a corporation to provide health care at a fixed price, they will ordinarily do it under an arrangement in which the hospital and physicians are both liable if the expenses exceed the revenue; that is,…

Action by a health care plan or insurer which seeks to enroll only healthy persons (low risk), thus reducing the risk to the plan. Of course, adverse selection results in enrollment of a group of persons who are below the norm in health, and thus likely to be more costly for the plan. Health care…

A fund set up as a reserve for unexpected expenses in a prepaid health plan. Organizations which provide prepaid health care for a fixed fee typically set up such pools to cover, for example, unusually large demands for hospital care or specialist services.  

In connection with computer software, answering three questions: (1) what can go wrong; (2) how likely is it, and (3) what are the consequences of failure There is a distinction between (1) a hazard, (2) a failure, (3) a risk, and (4) an accident.  

The use of severity of illness measures to estimate the risk to which a patient is subject.  

The legal right to refuse life-saving or life-sustaining treatment. A competent adult has the legal right to refuse medical treatment, even if that treatment is essential to sustain life. Some refer to this right as the “right to die.” The issue of the “right to die” arises in the situation where a person has a…

Increase in an organization’s assets or a decrease in its liabilities during an accounting period. This is in contrast with income, which refers to money earned during an accounting period.  

The date stipulated in a claims-made coverage policy as the earliest date an event may occur and be covered under that particular claims-made policy. For example, a policy for calendar year 1990 with a retroactive date of January 1, 1985, would cover an event occurring anytime on or after January 1, 1985, if the claim…

A facility which provides social activities to senior citizens, usually retired persons, who do not require health care. The provision of housing is not required for an institution or organization to be called a retirement center. A retirement center may furnish housing and may also have acute hospital and long-term care facilities, or it may…

A free-standing facility set up to provide care for patients who are unable to live independently, that is, who need assistance with the activities of daily living (ADL), and who may need occasional assistance from a professional nurse. Such professional nursing service is obtained from a visiting nurse. Regulations usually apply the designation of rest…